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What trend do we observe in all three metrics from 201-2019?

From 2010-2019 the metrics move predictively over the term from year-to-year. While there are down years and up years, the visualization shows growth over the duration of the period. When does revenue spike each year? Why?

Revenue spikes at the end of each year on 12/31. For Amazon, they may have payment periods with customers or suppliers that expire at the end of the year. People will often wait until the end of the term to pay off all outstanding debt. Amazon may encourage customers to pay debt off sooner by issuing a trade credit, or a discount off their purchase if paid in full before the due date. Amazon may recognize revenue at the end of each year, which could also explain the spike.

What pattern do we observe between revenue and gross margin? Explain.

When revenue increases, COGS increases, and gross profit margin degreases. Inversely, when revenue decreases, COGS decreases, and gross profit margin increases. Gross profit is sales COGS, while gross profit margin is the difference between gross profit/sales. Amazon can choose from several accounting methods to recognize revenue including LIFI, FIFO, or Average Cost. Depending on the goods that Amazon is selling, they may use a different method. For example, Amazon may use the LIFO method for their Amazon Go grocery stores but use the FIFO method for stuffed animals they sell through e-commerce.